Resale Value of Diamond Vs. Gold – Who Wins In 2022?

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De Beers marketed diamonds as the gemstone that lasts forever through their infamous ‘a diamond is forever. But do diamonds really last forever?

More importantly, will diamond retain their value in the long run?

Would you fetch close to or more than the diamond’s purchase price if you chose to sell the ring or earrings after some months or years?

And even more importantly, how does the resale value of diamonds compare to the resale value of gold?

How about gold? By now, we know that you can resale your 14k and 18k gold jewelry, but how does the resale value of gold compare to that of diamonds?

Keep reading for insights and everything you need to know about the resale values of gold and diamonds.

 

What determines the value of Diamond Resale Value?

Resale Value of Diamond Vs. Gold

The resale value of any diamond jewelry is determined by the stone’s quality, which narrows down to the 4Cs – Cut, Clarity, Color, and Carat weight.

These are the most important qualities of the diamonds, and they determine the diamonds’ purchase and the resale price.

But this is not enough; the diamonds’ resale value is determined by how one diamond piece of jewelry is compared to the others in the market.

Essentially, many other finer points determine the resale value of the diamonds. For example, a GIA-certified diamond should ideally be evaluated alongside a different GIA-certified diamond, preferably one with comparable qualities.

Resale Value of Diamond Vs. Gold

In such settings, the value and worth of the diamond will depend on factors like the types of inclusions in the diamonds, the fluorescence, as well as the precision with which the diamond is cut. Below is a detailed breakdown of these factors and how they influence the resale value of diamonds.

Grading certificates – popular diamonds certified in the jewelry market today are based on the type of certification they carry. The common grading certificates include the GIA, IGI, DGLA, and SGL, and you should always ask for the certification when buying diamonds, whether the diamonds are loose or set in jewelry. The certificate issued should give details proving the origin of the diamonds, their carat weight, clarity, color, and even the form.  Note that it would be impossible to resale the diamonds without the certificate.

Resale Value of Diamond Vs. Gold

4Cs – as mentioned above, this is an important factor when determining the quality of the diamonds. 4Cs guide the marketability of the diamonds, with the carat weight and the clarity of the gemstones determining the stones’ marketability and resale prices.

Resale Market – you also need to find the ideal market for your diamonds because there are numerous venues for you to resale the diamonds, including auction houses, pawnshop shops, and jewelry stores. Above this, the correct timing for the resale and the market demand will determine how much the diamonds fetch.

Procurement of the diamonds – the location of the diamonds’ purchase and sale are also important, and when reselling, branded diamond necklaces would fetch much less than unbranded pieces. But in general, the value of the diamonds drops by between 25% and 75%.

 

Diamond Resale Value: How Much is Your Diamond Worth?

Resale Value of Diamond Vs. Gold

Depending on the features of a diamond and where you bought it from, its resale value would be determined by multiplying its average retail price (use the value of a similar stone at the time) by a depreciating value in percentage between 30% and 75%.

This will give you a ballpark resale value for the diamond. It also means that, on average, diamonds lose between 30% and 75% of their value after purchase. So, this would be a good thing to keep in mind when shopping for diamonds.

There are cases where the resale value of diamond jewelry drops by 25%-50% of the original purchase price. So, it means that, unlike gold jewelry, diamonds’ resale value is often much lower than the purchase price of the said jewelry.

This happens because the retail stores tend to mark up the jewelry and gemstone prices despite the lower value of the diamonds, and this is ideally how they make money.

Resale Value of Diamond Vs. Gold

So, if you are wondering if diamonds have a resale value, you will be happy to know they do. The catch is that the resale value may be lower than anticipated.

Unlike gold, whose market is dynamic, diamonds’ market for loose diamonds and diamond jewelry is more static; the prices or value of the diamonds are relatively stable.

The prices of diamonds are also contingent on market forces that determine the demand and supply of the gems and, subsequently, their costs.

Based on all the features above, like the certifications, 4Cs, resale markets, and the details about the procurement of the diamonds, the diamonds may fetch between 25% and 50%. It will fetch 75% of the purchase price if you are very lucky.

 

What determines the value of gold?

Resale Value of Diamond Vs. Gold

There is a lot that determines the value of gold, and the market is the most important factor determining the value of this stone.

But despite all that happens in the market, the value of gold is ever rising or holding steady, and this happens because gold is an important factor in the world economies, as it guides the value of different important currencies.

Essentially, the demand and amount of gold held in the central bank’s reserves helps determine the US dollar’s value.

Over the years, the desire to hold on to gold as some kind of hedge against currency devaluation and inflation has remained strong, and all these come into play in driving up the prices of the precious commodity.

With gold having been used by humanity for at least 5000 years, things have changed, and there is a lot that determines the value of gold. So, let’s take a look at some of the things that determine the value of gold.

Resale Value of Diamond Vs. Gold

Monetary policies – the monetary policies controlled by the Federal Reserve will essentially determine the live prices of gold in the market today. The interest rates in the world market by the Federal Reserve have a considerable influence on the prices of gold because of opportunity cost, which is an economic term that describes giving up the certainty of guaranteed gains from one investment because there lies a possibility of even bigger gains from a different investment. So, when low interests mean nominal yields and actual financial loss, gold is the best investment commodity.

Global demand and supply – because of its rarity, gold is always in high demand. The high demand is further attributed to the aesthetics as well as the functional features of gold. So, with the high demand for gold from different industries, from fashion and jewelry to electronics, we can expect the value of gold to remain high.

Resale Value of Diamond Vs. Gold

Production of gold – Even though the production of gold has increased across the US, Russia, Australia, and China, the demand remains very high because gold is an inherently limited resource that is getting depleted quite fast.

Economic trends – with the current tumultuous economic state, the value of gold has peaked even further because it is deemed a safe investment haven, just like cash.

Value of currency – Gold prices rise when the value of the US dollar rises in other countries, which means that their local currencies have a lower value, resulting in a weakening demand that pushes gold prices further down.

EFTs – This is the other thing that influences the value of gold because gold prices are affected by the purchase and sale of EFTs; these often lead to a positive spin in the gold prices.

 

Gold Resale Value: How much is your gold worth?

Resale Value of Diamond Vs. Gold

Gold’s resale value is often high, and you’d be happy to know that the gold jewelry pieces may be worth more than you bought them for after some years or months. The value of gold is based on the purity level of the precious stone in karatage. So, in a sample, the value of gold would be determined using the formula:

Value of Gold in the sample = (Weight of Gold x Purity of Gold x Rate of Gold today) / 100

 

Why don’t diamonds have the same resale value as gold?

Resale Value of Diamond Vs. Gold

The reasons why diamonds don’t have the same resale value as gold include:

  • Diamonds are not rare commodities. They are available in plenty on the earth, and the marketing gimmicks that make you believe diamonds are rare are lies.
  • Quality checks for diamonds are not standardized worldwide, as with gold.
  • Most diamonds are non-certifiable, so they don’t hold much value. But then, even the certified diamonds have little value, and you shouldn’t expect much from the resale of the certified diamonds.
  • The value of diamonds is primarily tied to the 4Cs, which represent the quality factors for diamonds.
  • On the other hand, gold is much more valuable because it is rare, and even when alloyed, the percentage of pure gold will vary a lot, depending on the prevailing market conditions.

Diamond vs. Gold- Which one should you invest in?

Resale Value of Diamond Vs. Gold

Thanks to the high resale and inherent value of gold, gold holds more power and value, especially in case of high inflation.

It is also worth more generally. So, if you are looking for the most secure investment commodity between the two, you might want to settle for gold over diamonds. Diamonds are very pricey upfront, but they lose much of their value after purchase.

 

Conclusion

If you are to invest in either diamond or gold, especially in the current economic climate, we recommend investing in the best of gold jewelry and not diamonds.

Read more jewelry metal posts here or here

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